1. Technical Field of the Invention
The system described herein relates in general to transportational logistics systems and in particular to methods and system for efficiently routing products from a plurality of suppliers to a common plant destination in a cost effective manner.
2. Background of the Invention
The need to transport products from one location to another in a cost efficient manner is an old problem. However, in our “every man for himself” world, companies tend to minimize their own shipping expenditures without regard to certain externalities. For example, company A may use a small truck for small shipments and a large truck for large shipments because the shipping costs associated with one large truck is typically lower than the shipping costs associated with two small trucks. However, what is ignored is that company A may be driving that small truck down the road side-by-side with company B's small truck.
Unless company A and company B are traveling substantially the same routes (as opposed to partially overlapping routes) and they are aware of this fact, they are unlikely to combine their resources. Further, company A would generally be unwilling to increase its shipping costs in order to reduce company B's shipping costs, even if the net result was an overall decrease in shipping costs. Although these externalities may be accounted for contractually, typically they are ignored.
Of course, certain common distribution centers and common carriers are used by competitors to achieve some level of synergy. However, these systems are based on a “two point” model. Each supplier ships his products based solely on the starting and ending points. Specifically, the supplier typically accepts orders from customers (the ending points) and reconciles those orders with his manufacturing flow (the starting point). No consideration is given to when the common distribution center and/or common carrier would prefer to move the product. The supplier just expects his product to be shipped from point A to point B whenever he chooses. This business model is convenient for the supplier, but this convenience comes at a price.